SCHIP's fate may hang in balance

President Barack Obama rarely passes up the chance to assure his audiences that if they like their insurance, they will be able to keep it under a reformed health care system.

But there is one group that could become an asterisk to his pledge: lower-income children.

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Democratic members of Congress and advocacy groups are alarmed at a proposal in the Senate Finance Committee to move children out of the popular State Children’s Health Insurance Program when it expires in 2013 and into a new insurance exchange where they would be covered with their parents.

The proposal has stoked concern among advocates that the families of lower-income children could lose more than they gain in a health care overhaul, leaving them with higher out-of-pocket costs and fewer benefits. A bloc of liberal senators and 150 organizations have called on Finance Committee Chairman Max Baucus (D-Mont.) to opt for continuity and maintain SCHIP as it is, at least until the kinks are worked out of the reformed system.

“The intention of people working on the legislation is to preserve the types of benefits that are currently available through CHIP, but once you start digging through the language and provisions, it is clear that there is no guarantee that children won’t be left worse off,” said Lindsey Wade, senior policy associate with the Children’s Defense Fund. “There is good reason for children’s advocates to be concerned as the process moves forward.”

Baucus said through a spokeswoman that he will not allow children to emerge from the reform worse off. He ushered the $35 billion renewal of the program through Congress earlier this year.

“Sen. Baucus fought tooth and nail for that program, and he feels very strongly about it,” said Erin Shields, the senator’s spokeswoman. “He would never do anything to put children or that coverage in jeopardy.”

A major reason for the proposed policy shift is to encourage families to secure coverage together. Studies show that when children and their parents are both insured, the children are more likely to get the care, medicines and doctor visits they need, according to the Finance Committee. The uncertainty about SCHIP, a popular and successful program, stems from the secrecy surrounding the Finance Committee’s Gang of Six talks, which have played out behind closed doors for months while the rest of the Senate waits for the details. It underscores the challenge that lies ahead for Baucus, who will have to defend the deals he struck when his plan emerges.

In the letter from 153 organizations, including the United Way, the National Education Association and First Focus, the groups cited the president’s pledge to “fix what’s broken and build on what works,” and urged lawmakers to first and foremost, “do no harm to children.”